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First Principles of Business Law |
| Property law |
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5. Using property as a security |
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5.2.2. Enforcing a registered mortgage of land |
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Albert wants to know what rights the mortgagee has if he fails to repay the borrow money (that is, if he 'defaults' on the loan). Which of the following statements is correct? |
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(a) If Albert defaults on the loan, the mortgagee can apply to have the land sold, the proceeds of the sale going to repay the debt, with any remaining money going to Albert. (b) If Albert defaults on the loan, the mortgagee automatically becomes the legal owner of the land and the loan is treated as discharged. |
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